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(MoneyWatch) A recent report from Fidelity Investments estimates that a 65-year-old couple retiring in 2012 would need about $240,000 in today’s dollars to cover medical expenses throughout their retirement. This represents a 4 percent increase over the 2011 estimate of $230,000.

Since 2002, Fidelity’s estimate has increased every year except in 2011 (when the one and only decrease was due to a one-time adjustment that reflected changes in Medicare). These changes reduced out-of-pocket expenses for prescription drugs. Yet even this small improvement against the broader backdrop of rising health care expenses is in jeopardy if the Affordable Care Act is overturned by the Supreme Court. That would likely cause retiree health costs to rise even more. Fidelity’s estimate also doesn’t include vision, dental, or long-term care costs, painting a potentially even darker picture for millions of Americans. 

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What can you do?

For one thing, don’t give up! You can take steps now to address the threat of high health care costs in retirement.

First, realize that you don’t need to have all this money in your 401(k) or savings account today, dedicated just to cover retiree medical costs. You’ll pay for medical premiums and expenses throughout your life; for example, most retirees have Medicare’s premiums deducted from their monthly Social Security income. If you’re lucky enough to have a pension from work, you can also use that monthly income to pay for medical premiums and expenses.

However, using Social Security alone to fund Medicare premiums and medical expenses represents a challenge. Fidelity estimates that for the average couple, medical expenses would consume about 35 percent of their Social Security income in 2012 — and that percentage would increase to 61 percent in about 15 years.

As a result, you’ll need other sources of retirement income to pay for retiree medical costs. That means boosting your savings in your 401(k) or health savings accounts (HSA), if eligible. Many employers have implemented high-deductible health plans that combine HSAs with robust wellness programs. Often, these programs will contribute to your HSA if you participate in the wellness activities. 

Be well

Not participating in such a wellness program is actually worse than not taking full advantage of your company’s 401(k) match. Not only would you be leaving money on the table, you’d be passing up the opportunity to reduce future health care costs by improving your health. That’s a move only Homer Simpson would make!

How much can you save by taking care of your health? I’ve previously estimated that only about 30 percent, or $72,000, of the $240,000 projected by Fidelity would be needed to pay for Medicare premiums. The remainder, about $168,000, would pay for deductibles and co-payments — in other words, costs you’re charged when you get sick. While it’s unrealistic to think you can eliminate this amount entirely, it represents your total potential savings if you get serious about taking care of your health by maintaining a healthy weight and getting sufficient exercise.

Another win-win is to consider working during the early part of your retirement years. Not only will you earn additional money, but you might be eligible for medical coverage as an active employee, which will reduce your out-of-pocket expenses for medical care. Many employers provide medical insurance to part-time workers and subsidize a portion of the cost, so you won’t have to pay the full freight for insurance coverage. And working can keep you socially active and engaged with life in your retirement years, which might improve your health, as well!

While there’s no need to despair over this news, consider it serious motivation to take steps that will help you live long and live well in retirement.

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By Tony Bizjak
tbizjak@sacbee.com

Sacramento International Airport wants to dump its federal security screeners and replace them with private contractors.

Airport officials say they believe non-government screeners would do as good a job of ensuring airline safety, would be friendlier and potentially could get fliers through security faster.

“Anything we can do to enhance customer service, we want to try it,” said spokeswoman Linda Cutler.

Sacramento applied for the change April 5 under an “opt-out” clause in the federal aviation security law that created the Transportation Security Administration after the September 2001 terrorist attacks. The clause allows airports to use private security if they can get federal officials to agree that non-government screeners would do as good a job or better than TSA workers.

Notably, the TSA itself makes the determination. If allowed to opt out, Sacramento would become one of just a few large airports in the country to use private security screeners. The two largest areSan Francisco International and Kansas City.

In total, 16 airports use private screeners, out of about 450 airports nationally that have federal security programs. The TSA says it has rejected five requests, only one of which was from a large airport: Orlando, Fla.

Orlando recently reapplied.

The program, called the Screening Partnership Program, has been a political football in Washington, pushed by some members of Congress who contend the TSA is too big and expensive. While not publicly opposing privatization, TSA officials have cautioned that airport security needs to be managed in a centralized fashion that allows the agency to adapt rapidly to changing terrorism threats.

Aviation industry experts, however, say the debate may be as much about politics and philosophy as real results.

Under the program, the federal government maintains strong controls: The TSA approves and hires the private screening companies. The federal government pays for the security, not local airports. The TSA trains the private screeners. Those workers use TSA protocols and equipment. They even wear TSA uniforms. On-site TSA supervisors oversee operations at privatized airports.

“I don’t think the average Sacramento flier will notice a difference if it goes private,” said Joe Brancatelli, an advocate for business fliers.

Brancatelli cited San Francisco International, the largest of the 16 U.S. airports that employ private screeners. “Ask anybody who has been through San Francisco. It is generally unnoticeable.”

Matthew Klint, an aviation blogger with upgrd.com who focuses on TSA issues, said that, in his experience, private screeners at San Francisco are friendlier than TSA screeners.

But he said San Francisco checkpoint lines seem longer than at the other two airports he frequents,Los Angeles and Philadelphia. He said he suspects San Francisco officials ratchet up security. Hisbelt buckle sets off the alarm at San Francisco, but not at other airports.

“It’s almost like they try a little harder,” Klint said.

San Francisco airport uses Covenant Aviation Security of Illinois under a contract with the TSA. Airport spokesman Charles Schuler said private worker retention is higher than the TSA average, but he is not aware of any notable service difference.

“It is still the TSA calling the shots in terms of what is being screened and the equipment used,” he said.

San Francisco was one of five initial test airports for the program, beginning in 2002. All five of those airports have continued to use private security. They are Kansas City, Mo.; Rochester, N.Y.;Jackson Hole, Wyo.; and Tupelo, Miss.

Testifying before Congress in February, Kansas City airport director Mark VanLoh said private security allows more staffing flexibility to meet service requirements and is “more effective in dealing with (employees who are) non-performers.”

Sacramento airport officials and the TSA bumped heads in 2004 when wait times at security checkpoints increased to more than a half-hour in some cases, and in one instance hit nearly 90 minutes. TSA responded by adding staff. Complaints are down.

But Sacramento airport chief Hardy Acree said shorter lines may be, in part, a function of the recession, which reduced the number of passengers going through security checkpoints. “When traffic comes back, we anticipate we will be in the same kettle of fish,” Acree said.

Acree said Sacramento based its decision to apply for opt-out after checking with other airports that employ private companies and concluding service would improve.

The TSA historically has been cool to the privatization idea. Last year, TSA head John Pistole essentially froze the program, saying he would not approve more airport opt-outs unless “a clear and substantial benefit could be realized.” He argued that private screeners cost the government slightly more overall than federal screeners. The federal Government Accountability Office has challenged TSA’s numbers.

Rep. John Mica, a Florida Republican, has pushed the privatization issue. He recently led a successful effort in Congress to amend the opt-out law, imposing a 120-day deadline for TSA to decide whether an airport can privatize and pushing TSA to review requests in a more transparent manner.

The amended law clarifies that TSA must allow airports to opt out if the agency determines the private security option would not compromise security and would be at least as cost-efficient as using government workers.

TSA officials did not comment on the Sacramento application in an email response to Bee questions. But the agency said it still is asking airports an optional question of how privatization might lead to cost savings and efficiencies.

The agency said that if it denies an airport request, it would provide its reasons and “recommendations on how the airport operator can address the reasons for the denial no later than 60 days following the denial.”

Sacramento airport officials said they met with the TSA two weeks ago in Washington, D.C., to make their case and came away uncertain about TSA’s intentions.

“They weren’t very forthcoming,” airport spokeswoman Cutler said.